CLA-2 OT:RR:CTF:TCM H193879 ARM
Port Director
U.S Customs & Border Protection
555 Battery Street, Room 319 San Francisco, CA 94111
Re: Application for Further Review of Protest No. 2809-11-100512; Classification of Printed Circuit Assemblies (PCAs) and chassis for installation into encoders, multiplexers and remultiplexers for television
Dear Port Director:
The following is our decision regarding Application for Further Review (AFR) of Protest No. 2809-11-100512, timely filed on September 8, 2011, by Barlow & Company, LLC, on behalf of its client, Plexus Corporation, regarding the classification of Printed Circuit Assemblies (PCA) and chassis for digital encoders, multiplexers and remultiplexers, under the Harmonized Tariff System of the United States (HTSUS).
FACTS:
The protest describes twenty entries from May 6th 2010 to August 18, 2010, entered under subheadings 8529.90.13, HTSUS, as "Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528: Other: Printed Circuit assemblies: Of television apparatus: Other: Other”, and 8529.90.83, HTSUS, as “Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528: Other: Other parts of articles of headings 8525 and 8527: Of televisons apparatus: Other.” CBP liquidated the entries from March 18 through July 1, 2011, as entered. Protestant claims classification in subheading 8517.70.00, HTSUS, as parts of “…other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528.”
On May 5, 2013, the Port of San Francisico received a letter, certified as having been mailed on May 6, 2012, from Plexus Corp., requesting accelerated disposition under Customs Regulations, section 174.22 (19 CFR 174.22) for the instant AFR. In light of the request for accelerated disposition, we are unable to accommodate importer’s meeting request before issuing this decision.
The instant merchandise consists of PCAs and chassis for incorporation after importation into digital encoders, multiplexers and remultiplexers used in cable television. In the protest submission the PCA’s are described as “composed of a fiberglass board onto which electrical circuits are etched, and are populated with resistors, capacitors, transistors, inductors, integrated circuits, and connectors.” The chassis are described as “composed of a sheet metal container with power supply, fans and a small printed circuit board that functions as a controller board for the fan and power supply.”
The protest submission describes the functions of the encoder, multiplexer and remultiplexer as follows, in Exhibit 2 (Declaration of Plexus Customer Manager) to the submission:
The finished Harmonic digital encoders convert analogue or digital video, audio and data signals of the source information (such as CATV (Cable television) programming) into digital signals by means of compressing and encoding techniques in compliance with the MPEG-2 and the newer MPEG-4AVC/H.264, or MPEG-4, video compressin standards.
The finished Harmonic digital multiplexer…combines several input MPEG-2 transport stream signals into a single MPEG-2 transport stream, using multiplexing technologies, in order to increase efficiency in transmission. The apparatus is capable of receiving up to 64 input MPEG-2 transport stream signals and integrating and reproducing those input transport stream signals into a MPEG-2 transport stream signal compliant with the DVB-ASI (Digital Video Broadcasting Asynchonous Serial Interface) standard. It can integrate multiple video, audo (including multi-channel audo) and data signals in the same multiplexed output signal.
The finished Harmonic remultiplexer…combines up to 20 ASI (Asynchonous Serial Interface) input signals compliant with the DVB-ASI (Digital Video Broadcasting Asynchonous Serial Interface) standard, reshapes the bit rate of incoming transport streams, and enables local programming to be inserted into the data stream. The apparatus can convert a CBR (Constant Bit Rate) stream into a VBR (Variable Bit Rate) signal and performs real time statistical multiplexing for dynamic bandwidth allocation. The system operator can choose desired programmes from the incoming transport streams, discard one or more unwanted programmes, and switch programming line-ups dynamically.
The finished encoders, multiplexers and remultiplexers into which the PCAs and chassis are incorporated, are said to be used for transmission of Cable television (CATV) program providers to the Cable TV operators.
Plexus protest asserts that the classification of the subject merchandise should be in accordance with a September 2009 decision of the Harmonized System Committee (HSC) of the World Customs Organization (WCO). That decision considered the classification of certain encoders, multiplexers and remultiplexers, and determined that they were classifiable in subheading 8517.62, as “other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof: Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus.” Plexus also asserts that CBP’s rulings issued on substantially similar merchandise, prior to the 2007 amendment of the HTSUS, are not applicable in light of the amendments to the HTSUS in 2007, and therefore the subject merchandise should be classified in heading 8517, HTSUS. In Headquarter’s Ruling Letter (HQ) W967697, dated May 4, 2009, AFR of Protest No. 4101-05-100032, we considered the classification of Plexus Corporation’s PCAs for six different models of encoders entered in 2004. In HQ H005123, dated December 29, 2008, we classified the same merchandise on AFR to Protest No. 3195-06-100298 for entries in 2005.
ISSUE:
Whether the merchandise is classifiable in heading 8517, HTSUS as “other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof” or in heading 8529, HTSUS, as “Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528.”
LAW AND ANALYSIS:
Initially, we note that the matter protested is protestable under 19 U.S.C. §1514(a) (2) as a decision on classification. The protest was timely filed, within 90 days of liquidation of the first entry for entries made before December 18, 2004, and within 180 days of liquidation of the first entry for entries made on or after December 18, 2004. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2) (B) (ii), (iii) (codified as amended at 19 U.S.C. § 1514(c) (3) (2006)).
Further Review of Protest No. 2809-11-100512 was properly accorded to Protestant pursuant to 19 C.F.R. § 174.24 because the decision against which the protest was filed involves specific factual and legal questions that have not been the subject of a Headquarters ruling or court decision: the proper classification of parts of encoders, multiplexers and remultiplexers in light of the current text of heading 8525 and 8517, HTSUS.
Classification under the HTSUS is made in accordance with the General Rules of Interpretation. GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.
The relevant 2010 HTSUS provisions for the subject PCAs and chassis are as follows:
8517 Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof:
8517.70.00 Parts.
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8529 Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528
8529.90 Other:
Printed circuit assemblies:
Of television apparatus:
Other:
8529.90.13 Other….
Other parts of articles of headings 8525 and 8527:
Of televisons apparatus:
8529.90.83 Other
Emphasis added.
There is no dispute that in accordance with Section XVI, Note 2(b), the PCAs and chassis are classifiable as parts suitable for use solely or principally with encoders, multiplexers and remultiplexers. Accordingly, classification of the parts depends upon the classification of the apparatus with which they will be used namely the encoders multiplexers and remultiplexers.
Insofar as the finished merchandise meets the terms of headings 8525 or 8528, HTSUS, it cannot be classified in heading 8517, HTSUS by the express terms of the latter heading. Heading 8525, HTSUS, provides for “transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus….” Both headings 8517 and 8525 and 8528 utilize the terms transmission and reception. The applicable distinction in terms of headings 8517 and 8525 or 8528, HTSUS, is whether the transmission or reception is “for television” or “of voice, images or other data.” In sum then, even if the transmission or reception is “of voice, images or other data,” if that transmission or reception is “for television”, the apparatus is excluded from heading 8517, HTSUS by the terms of that heading.
The HSC document that described the goods under consideration contained the following diagram and explanation of the placement of encoders and multiplexers in the line of Community Antennae Television (CATV; aka Cable Television) transmission:
4. CATV transmission system is processed as follows.
(1) A program-provider supplies analogue or digital video, audio & data signals to Encoders which compress and encode the video, audio & data signals into ASI (output) signals in compliance with MPEG-2 standard.
(2) Output signals (ASI)* of several Encoders are entered into a Multiplexer which combines several signals (ASI) of Encoders into a ASI output Transport Stream signal by means of some multiplex techniques in order to carry several communication channels.
* ASI is a streaming signal compressed & encoded by MPEG-2 standard.
(3) Output signals (ASI) of Multiplexer are entered into a Signal Converter which convertsASI signals into DS-3 or STM signals which will be transported further to the Optical Transmitter.
(4) The Optical transmitter transmits the optical video, audio & data signals to the Optical Receiver through the optical network run by Network Operator.
(5) Optical Signals of Optical Receiver are transported to Signal Converter which converts DS-3 or STM signals into ASI signals.
(6) The ASI signals of the Signal Converter are connected to the Decoder which converts ASI signals into audio, video & data signals. The video & audio signals of the Decoder are transported to Modulator which converts or modulates video, audio & data signalsinto RF (Radio Frequency) signals.
(7) The RF signals enter into HFC network to supply TV service subscribers.
The diagram above, represents an example of how encoders, multiplexers and remultiplexers may be arranged in a CATV transmission system. It depicts the role within television transmission of the articles. The encoder compresses and encodes signals received from the program provider in accordance with MPEG standards. The encoder then transmits or passes along the processed signals, to the multiplexer. The multiplexer receives the processed signals and combines them into a single MPEG transport stream for output. Although not depicted in the diagram, this multiplexed output is then passed on or transmitted to a remultiplexer which combines the signals again into a DVB-ASI standard, processes them further, and transmits them or passes them along for eventual transmission to be received and displayed by the CATV subscriber.
CBP has a longstanding line of decisions which have determined that components of television transmission systems which lie in the transmission path, receive a signal and the output of which is relayed or fed further in the tranmissioin system for eventual final reception and display , are classified in heading 8525, HTSUS, as transmission apparatus. See, e.g. HQ 955309, dated December 21, 1993, HQ 958422, dated February 1, 1996, HQ 962919, dated April 10, 2000, HQ H005123, dated December 29, 2008, and HQ H068675, dated October 16, 2009. The text of heading 8525, HTSUS did not change in 2007 to the extent that it has covered “ transmission apparatus for…..television” since the above rulings were issued.
The terms “transmission” and “reception” are not defined in the Tariff or ENs. A tariff term that is not defined in the HTSUS or in the ENs is construed in accordance with its common and commercial meaning. Nippon Kogaku (USA) Inc. v. United States, 69 CCPA 89, 673 F.2d 380 (1982). Common and commercial meaning may be determined by consulting dictionaries, lexicons, scientific authorities and other reliable sources. C.J. Tower & Sons v. United States, 69 CCPA 128, 673 F.2d 1268 (1982). Reference to lexicographic authorities is proper when determining the meaning of a tariff term. Hasbro Industries, Inc. v. U.S., 703 F. Supp. 941 (CIT 1988), aff'd, 879 F.2d 838 (1989).
The McGraw-Hill Encylopedia of Science & Technology (9th Edition, Vol.18) describes the HDTV (High Density Television) Standard below:
The main HDTV transmitter operations are video/audio coding and compression, data multiplexing into packets, data scrambling, channel coding (for error detection and correction), synchronization multiplexing, and digital modulation (for broadcast transmission). The HDTV receiver reverses the operations of the transmitter.
This comports with our interpretation of the term “transmission apparatus” in the rulings cited above.
Further, transmission is defined as:
The passage of radio waves in the space between transmitting and receiving stations; also : the act or process of transmitting by radio or television
http://www.merriam-webster.com/dictionary/transmission
The transfer of information from one point to one or more other points by means of signals.
Recommendation ITU-R V.662-3 (2000) - Ap. 2, § 1 (1.03);http://www.itu.int/ITU-R/asp/terminology-definition.asp?lang =en&rlink ={578E212A-7429- 4D53-B86E-91DDBBC56670}
Reception means:
the receiving of a radio or television broadcast
http://www.merriam-webster.com/dictionary/reception
Based on our prior rulings, we have interpreted the term “transmission” in the broader sense, as “the act or process of transmitting by radio or television” as set forth in the Webster definition.
Support for this interpretation is also found in the United States v. Ampex Corp, Air Express Int’l Corp, et al., 460 F.2d 1086, 1088 (CCPA, June 1, 1972), where the court found that the term “transmission apparatus”, as it appeared in the Tariff Schedules of the United States (TSUS), the predecessor to the HTSUS, is very broad. We note that the phrase “transmission apparatus for . . . television” has not substantially changed between the TSUS and the HTSUS.
The Ampex Court stated:
On the other hand, it is a matter of common knowledge that the apparatus used in television transmitting and receiving may include a variety or different electronic circuits performing diverse functions, optical elements for the camera, transmitting and receiving circuitry, and transmitting and receiving antennas. Judge Newman cited a chapter on Television Systems Fundamentals in a book entitled Television Broadcasting as setting forth a variety of components used in television systems. The United States v. Ampex Corp., Air Express Int’l Corp., et. Al., 460 F.2d 1086, 1088 (CCPA, June 1, 1972).
In that case, the court found that the terms “television transmission and reception apparatus” encompassed a broad range of goods.
Further, in understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. The ENs, though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. CBP believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The ENs for heading 85.17, indicate that 85.17, includes, among other articles, in pertinent part, the following:
*****
This heading covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or by electro-magnetic waves in a wireless network. The signal may be analogue or digital. The networks, which may be interconnected, include telephony, telegraphy, radio-telephony, radio-telegraphy, local and wide area networks.
*****
(II) OTHER APPARATUS FOR TRANSMISSION OR RECEPTION OF VOICE, IMAGES OR OTHER DATA, INCLUDING APPARATUS FOR COMMUNICATION IN A WIRED OR WIRELESS NETWORK (SUCH AS A LOCAL OR WIDE AREA NETWORK)
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(G) Other communication apparatus.
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This group includes :
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(4) Multiplexers and related line equipment (e.g., transmitters, receivers or electro-optical converters).
*****
PARTS
Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), parts of the apparatus of this heading are also classified here.
The EN for heading 85.25 have limited examples of articles other than specific “transmitters” that would include the articles at issue.
The ENs do not provide much guidance with respect to the subject articles. For instance, multiplexers are listed in the EN 85.17 and the EN 85.25 does not mention multiplexers, encoders, or any of the devices used to receive and transmit a signal for television in order to change, compress or combine it into a different format.
However, the ENs can neither limit nor expand the scope of a heading, and the lists of exemplars in the ENs are not exhaustive. Furthermore, "although generally indicative of proper interpretation of the various provisions of the [Harmonized Tariff System], the Explanatory Notes . . . are not legally binding" on the United States. H.R. Conf. Rep. No. 100-576, 100th Cong., 2d Sess. 549 (1988), reprinted in 1988 U.S.C.C.A.N. 1547, 1582.” Lynteq, Inc. v. United States, 976 F.2d 693, 699 (Fed. Cir. 1992) Lastly, there are a wide variety of multiplexers, some of which are used for other than television. The standards for which the subject articles are manufactured, in this case MPEG-2 and MPEG-4, are widely used as television signal standards. Hence, the exemplar “multiplexers” in EN 85.17 does not apply to the multiplexers at issue here. As mentioned above, digital signals, whether for telecommunications or for television, are encoded to a format such as MPEG-2 or MPEG-4 best suited for the type of data being transmitted. The formats used to encode and subsequently multiplex a signal are distinct by each industry. Plexus does not dispute that MPEG-2 formatting is particular to cable television. Therefore, a multiplexer receiving, combining and transmitting signals in accordance with MPEG-2 and other known television formats, in furtherance of the ultimate transmission to a receiver and television, should remain classified in heading 8525, HTSUS, per the exclusion in heading 8517, HTSUS. The same analysis applies with respect to the encoder and remultiplexer.
Prior to the 2007 amendments to headings 8517 and 8525, the EN exemplars included “multiplexers of all categories . . . .” under the reprinted heading text. After the 2007 heading and EN amendments, the multiplexer exemplar is no longer listed directly under the reprinted heading text, but under the subset of “other apparatus for transmission . . .”, called “other communication apparatus.” Furthermore, the language “of all categories” is removed from the text, implying that there are multiplexers and other line equipment that would not fall into the superior descriptions. Lastly, the text in both versions explicitly lists transmitters and receivers as “related line equipment” of heading 8517, HTS. Yet, the ENs to headings 8525 and 8528 also list “transmitters for . . .television” and “receivers of television broadcasts.”
Goods of headings 8517 and 8525 or 8528 may transmit or receive by line (a cable). Goods of the headings might be a transmitter or receiver or multiplexer or other equipment on the line. Goods of the headings may transmit or receive digital data. The crucial difference is whether the data transmitted or received by the device in question is formatted for and understood as being “for television” and if so, the device cannot, by the terms of heading 8517, HTS, be classified there. These articles are transmitting or receiving in the same manner as they would for purposes of heading 8517, however the difference is that with respect to the specific merchandise in question, the transmitting or receiving is for television, and therefore they cannot be classified in heading 8517.
The data that will pass through the encoders and multiplexers for which the instant PCAs and chassis are parts, is television programming recorded by television cameras for television viewing. It will ultimately be transmitted to subscribers homes, and watched, in the vast majority of cases, on their television. Even Plexus does not claim otherwise. Therefore the subject encoders, multiplexers and remultiplexers are classified in heading 8525, HTSUS.
Therefore, by application of GRI 1 and Section XVI Note 2(b), the PCAs and chassis are classified in heading 8529, HTSUS. The PCAs are specifically provided for in subheading 8529.90.1300, HTSUS, as "Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528: Other: Printed Circuit assemblies: Of television apparatus: Other: Other.” The general, column one rate of duty in effect at the time of entry was 2.9% ad valorem. The chassis are specifically provided for in subheading 8529.90.8300, HTSUS, as "Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528: Other: Other parts of articles of headings 8525 and 8527: Of televisons apparatus: Other.” The general, column one rate of duty in effect at the time of entry was 2.9% ad valorem.
In March of 2010, the Harmonized System Committee (HSC) of the World Customs Organization (WCO) published three classification opinions for encoders, multiplexers and remultiplexers. See Amendments to the Compendium of Classification Opinions (Doc. NC1553, Annexes O/15, O/16, and O/17 (HSC/45/ Report March 2010)).
Protestant argues that despite what CBP may believe the proper analysis under the HTSUS requires, we are bound to follow the decisions of the HSC. We have addressed the status of these decisions previously. We have stated:
In Treasury Decision (T.D.) 89-80, decisions in the Compendium of Classification Opinions should be treated in the same manner as the Harmonized Commodity Description and Coding System Explanatory Notes (EN’s), i.e., while neither legally binding nor dispositive, they provide a commentary on the scope of each heading of the HTSUSA, and are generally indicative of the proper interpretation of these headings. T.D. 89-80 further states that EN’s and decisions in the Compendium of Classification Opinions "should receive considerable weight." See HQ 963181, dated September 20, 2000.
At the same time, the courts have been clear on this point. “the WCO opinion is not binding and is entitled, at most, to ‘respectful consideration.’ Cummins Inc. V. United States, 454 F.3d 1361, 1366, citing Sanchez-Llamas, 2006 U.S. LEXIS 5177 at*39 (quoting Marbury v. Madison, 5 U.S. 137, 1 Cranch 137, 177, 2 L. Ed. 60 (1803)). It is not a proxy for independent analysis.” Cummins Inc. v. United States, 454 F.3d 1361 (Fed. Cir. 2006). As indicated above, we find that we find that the PCAs and chassis are classifiable respectively in subheadings 8529.90.1300, HTSUS, as "Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528: Other: Printed Circuit assemblies: Of television apparatus: Other: Other” and 8529.90.8300, HTSUS, as "Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528: Other: Other parts of articles of headings 8525 and 8527: Of televisons apparatus: Other.”
HOLDING:
By application of GRI 1 and Section XVI Note 2(b), the PCAs and chassis are classified in heading 8529, HTSUS. The PCAs are specifically provided for in subheading 8529.90.1300, HTSUS, as "Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528: Other: Printed Circuit assemblies: Of television apparatus: Other: Other.” The general, column one rate of duty in effect at the time of entry was 2.9% ad valorem. The chassis are specifically provided for in subheading 8529.90.8300, HTSUS, as "Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528: Other: Other parts of articles of headings 8525 and 8527: Of televisons apparatus: Other.” The general, column one rate of duty in effect at the time of entry was 2.9% ad valorem. Therefore, your are instructed to deny the Protest.
In light of the request for accelerated disposition of this protest, you are instructed to issue the denial of the protest within 30 days following the date of mailing by certified or registered mail of the request for accelerated disposition.
Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.CBP.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division